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Flat rate pay is when someone is paid per job instead of a salary or per hour. This flat-rate system motivates workers to finish as many jobs as possible, but can lead to sloppy work if the workers sacrifice quality for quantity. Some auto shops pay their mechanics a salary, or a hourly rate that roughly translates into a salary. Other shops pay mechanics based on time billed. Some shops pay their mechanics a flat-rate fee.

Overview

Many auto shops charge flat-rate fees for many, if not most, jobs. Mechanics paid a flat rate get a set percentage of that flat-rate fee. For example, oil changes cost customers a predetermined amount, and the mechanic's pay is a predetermined percentage of that amount. To reach a flat-rate fee, the shop decides how much time an average job takes. Methods for making this determination include industry studies, analyzing the shop's own history as well as trial and error. Shops use hours and 10ths of hours to outline flat rates. For example, two-tenths of an hour is 12 minutes because one-10 is six minutes. Shops expect their mechanics to bring in more profit by performing jobs faster than the flat-rate time.

Advantages

Advantages for the car shop paying mechanics flat-rate fees are that the shop can estimate its income by using averages and that the shop does not have to pay relatively slow mechanics more. This structure also motivates mechanics to work more quickly. Customers benefit too; they can budget for a repair job and know that the price will be the same, regardless of if the mechanic finishes quicker than expected or takes longer than expected. However, many car shops charge their customers flat-rate fees, regardless of if the shops pay the mechanics a flat rate, hourly or salary.

Disadvantages

Disadvantages can happen in many ways. For example, mechanics who are having a bad day that spirals into a bad week, and perhaps a bad month or more, might take longer to complete jobs. This eats into the shop's bottom line because the mechanic should have been moving to another job after completing the first job. A shop can also underestimate the time a job takes, and therefore underprices the job. Also, mechanics might work quickly but not as effectively. Shops should emphasize finding the balance between quality and quantity.

Variations

Some auto shops pay mechanics different flat rates for the same jobs. Experience, certification and other issues factor into the flat-rate pay. Other shops might decide to pay mechanics the same flat rate, regardless of experience and certification. This could breed resentment if more-experienced mechanics know they are being paid the same or similarly to newer mechanics.

About the Author

Kelly Short has a bachelor's degree in English writing and a master's degree in deaf education. She has more than nine years of newspaper experience as well as career center experience, White House experience and teaching experience.